WILLING TO DEAL

Green Growth open to changing its bid for pot-company Aphria,

Green Growth Brands Inc. is flexible and open to negotiations on its unsolicited takeover offer for Aphria Inc., though the two companies haven’t had a face-to-face conversation about the bid.

“It’s likely there needs to be some negotiation and there’s a chance that the offer might change,” Green Growth chief executive officer Peter Horvath said in a phone interview.

Green Growth last week submitted an all-stock takeover offer it had first proposed in December, which it said valued Aphria at $2.4 billion ($1.8 billion U.S.). Today that offer is worth about $2.1 billion based on Green Growth’s share price, well below Aphria’s market val- ue of $2.6 billion. Aphria earlier said the bid was too low and advised shareholders to take no action until its board issues a recommendation.

Horvath said he’d be open to discussing a strategy that would include helping Aphria raise capital, for example.

“I think there’s always a chance that it could take on a form that’s different from what our bid was and it might not just be economics, it could be the ability to raise capital for their business,” he said.

Columbus, Ohio-based Green Growth has offered 1.5714 shares per Aphria share and plans to complete a third-party equity financing of $300 million at $7 a share to fund what would be the first large crossborder takeover in the cannabis industry. That’s nearly 40 per cent above Green Growth’s Wednesday closing price of $5.05.

CIBC analyst John Zamparo said last week it’s unlikely Aphria shareholders will accept the offer.

“We believe that ultimately this bid will not entice a majority of Aphria shareholders,” he said.